India has reportedly frozen the assets of cryptocurrency exchange platform WazirX, a Mumbai-based crypto firm Binance CEO Changpeng Zhao now says his compamy never completed an acquisition deal with, despite having announced the purchase in November 2019.
On Friday, the federal Enforcement Directorate (ED), the agency tasked with fighting financial crime in the country, revealed it froze 646.70 million rupees (roughly $8.16 million, £6.75 million) worth of assets belonging to the exchange.
The ED’s actions relate to an investigation against the platform dating back to 2021, with WazirX accused of violating India’s foreign exchange regulations.
Laundered funds converted into cryptocurrencies
According to a press release ED published on Friday, WazirX had aided fraudulent activities of at least 16 fintech companies suspected of engaging in money laundering.
The exchange, however, failed to cooperate with the authorities, doing so despite repeated approaches to provide crypto transactions and KYC details related to the companies under investigation. The ED thus accuses WazirX of helping the said foreign companies to convert laundered funds into crypto assets – that are ostensibly “untraceable at the moment.”
While doing fund trail investigation, ED found that large amounts of funds were diverted by the fintech companies to purchase Crypto assets and then launder them abroad. These companies and the virtual assets are untraceable at the moment,” the watchdog wrote.
The police conducted a search on August 3, at one of the directors, Sameer Mhatre, and who despite being found to have “complete remote access” to WazirX databases, did not offer any help.
The ED believes the “maximum amount of funds were diverted to WazirX exchange and the crypto-assets so purchased have been diverted to unknown foreign wallets.”
According to ED, its investigations into WazirX and the suspected fintech firms had revealed that about 570 million rupees had been laundered.
As noted above, Binance CEO Zhao has said the exchange never pushed the WazirX deal over the line, due to issues he says he cannot disclose.
Recent allegations about the operation of WazirX and how the platform is managed by Zanmai Labs are of deep concern to Binance. Binance collaborates with law enforcement agencies all around the world. We would be happy to work with ED in any way possible.”
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